SPX and Cannabis Stocks in Focus

Note: There will be no video today as I am out of the office. Thank you for your understanding.

^SPX early +0.50% rise has kicked off a rally back to new all-time highs, and Futures now lie about 30 points under the first area of importance near last Tuesday’s peak of 6757. This should be exceeded, which should carry December S&P Futures up to near 6800, while SPX cash index (^SPX) should push up to challenge and exceed 6799. I expect ultimately that ^SPX very well could reach 6850 which might line up with DeMark exhaustion within 2-3 weeks, while Elliott-wave structure also makes the case for strength over the next couple weeks before a late October decline.

S&P 500 E-mini Futures

Source: TradingView

The current view from Elliott-wave Forecast also gels with my view of a mid-October minor peak for ^SPX, so i expect the next couple weeks to be positive before resulting in a mid-October stallout and trend reversal. At present, SPX should push to new highs, and rally up to mid-October (marked as 3 below) Thereafter, a potential pullback could happen into early November which should align with cycles to make a low (near 4 in the chart below) Thereafter, a rally back to new highs into end of year likely gets underway. Once i understand the potential for how deep a late October decline will be into November, i’ll attempt to give an alternative forecast for year-end.

Elliot Wave Forecast, SPX 240 (Dynamic)

Source: Elliotwave Forecast

BofA Global Fund Manager Survey Investor sentiment as of the latest September report rose to seven-month highs, yet has not exceeded prior peaks from February of this year, and remains well below the peaks of the last 20 years. I think it’s important to note that sentiment has started to escalate over the last month, which also gels with AAII sentiment having improved to show more Bulls than Bears in its latest reading. However, it’s also important to note that Sentiment remains well below peaks seen over the last 20 years going back since 2000 which were seen at/near minor peaks in price for US Equity markets. (Chart shown is from Bank of America).

Bofa Global FMS Investor Sentiment Rises to 7-month High

Source: Bofa Global Fund Manager Survey

Cannabis names look attractive at current levels, following President Trump having posted a video on social media Sunday touting the medical benefits of “hemp-derived CBD” for seniors. The ETF MSOS 29.37%  (AdvisorsShares Cannabis ETF) is a diversified way of owning various names in this space, and I anticipate a coming test and breakout of prior highs near $6.02 from August. Above $6.02 should lead to $6.74, then $7.84. Overall, Cannabis names have gained technical appeal recently following the spike in volume over the last month technical progress.

AdvisorShares Pure US Cannabis ETF

Source: TradingView

Disclosures (show)

Stay up to date with the latest articles and business updates. Subscribe to our newsletter

Articles Read 1/2

🎁 Unlock 1 extra article by joining our Community!

Stay up to date with the latest articles. You’ll even get special recommendations weekly.

By continuing, you agree to the Terms of Service and Privacy Policy.

Already have an account? Sign In

Events

Trending tickers in our research

Stay up to date with the latest articles and business updates. Subscribe to our newsletter

Articles Read 1/2

🎁 Unlock 1 extra article by joining our Community!

Stay up to date with the latest articles. You’ll even get special recommendations weekly.

By continuing, you agree to the Terms of Service and Privacy Policy.

Already have an account? Sign In